Tuesday, September 20, 2011

Buffet Rule

Warren Buffet's selfless and noble request of the President, "Please, Mr. Obama, raise my taxes because it's just not fair that us billionaires pay so little...I feel terrible about the whole thing, really I do", was carried forth with lightening speed by the Obama administration, always ready to help, in their quick pronouncement of the "Buffet Rule". Leave it now to us nagging skeptics to point out the convenience of this plan, just days after Mr. Obama's prime time spending proposal. The Obama proposal, hastily criticized for its "funding plan to come later language" now springs forth the Buffet Rule, a timely salvo for the proposal's shortcomings.

Mr. Buffet's argument lies in the fact, so he testifies, that he pays a far lower tax rate than his nanny, er, secretary. It's just so damn unjust, so un-patriotic and so utterly annoying.

Ol' Warren, the sly potato that he is, cleverly fails to point out that his secretary's income is taxed at ordinary tax rates, while the Oracle of Omaha takes no salary from Berkshire Hathaway, preferring his recompense entirely in the form of long-term capital gains. This small crime of omission, might leave the great huddled masses to mistakenly conclude that rich people don't pay taxes, but so be it. He's just stating the facts. Let people draw whatever conclusions they like. One can only be left to guess if Obbie, too, falls into this class of the unschooled, or if he is just tying to pull a fast one on the American public in an election year.

Call it politics if you like, but it's fundamentally dishonest. If Buffet was above-board about this whole matter he would have simply, plainly and clearly made the case that what America needs to do to generate additional revenue is raise the capital gains tax rate and, if you agree, thereby make the tax system more fair. But what Buffet and Obama both knew, of course, is that this kind of frankness would have set off a heated debate about the impact of higher capital gains rates on the already abysmally low rate of investment in America. And who wants that sort of aggravation?

By couching the argument in the vague premise that he, as the biggest of all fat cats, is making out like a bandit, Mr. Obama can catch the quick shovel pass and, hopefully, carry it unimpeded into the endzone. After all, who wants to see rich people not pay their fair share?

This media circus follows closely on the heels of Buffet's prior cameo appearance when he rode his white horse in to see Brian Moynihan at Bank of America. Coming to Warren as an apparition, while he cleansed his sagging privates in the bath, he thought, "Gee, maybe I can lend the Bank $5 billion at preferred rates...not that they need the capital, or anything but just, well, because". This revelation too, coming within days of his prior visit to the While House. We can only wait to see what happens next.

Think what you'd like, but I'm thinking that Warren may not be the first fundamentally dishonest billionaire, but he is certainly becoming the most visible.